Dollar-Priced Gold

by Ranting Andy - Miles Franklin
 

  

I have long emphasized a point that few – if any – discuss regularly. To me, it’s not just the MOST IMPORTANT VARIABLE in understanding REAL MONEY; but ultimately, the key to the Cartel’s demise, and with it, the GLOBAL FIAT CURRENCY REGIME. And that point, of course, is that the world DOES NOT revolve around the United States!

Twelve years into the world’s most powerful bull market – or should I say, the most powerful fiat bear market – I cannot recall a SINGLE DAY when the U.S. MSM, or newsletter/analyst community – discussed the movement of PM prices in anything other than dollars.

Remember, for a substance to truly act as MONEY – as opposed to just currency – it must meet ALL the parameters below. Dollars, Euros, and Yen only meet the two black-highlighted points – the LEAST IMPORTANT, I might add – as countless substances are both divisible and fungible…

Conversely, only GOLD and SILVER are accepted mediums of exchange EVERYWHERE – which the dollar, Euro and Yen are decidedly NOT – and serve as reliable stores of value, exactly the OPPOSITE of the dollar’s performance during the Fed’s 99-year “reign of terror”…

Sadly, the secular, sheltered MSM – and much of the “PM community” – refuses to acknowledge, or even understand, that these issues are not just American, but GLOBAL. And equally important, that PMs are not only priced in dollars. The fact is, essentially EVERY country has its own fiat currency; most of which have been anchored to the failing dollar since the gold standard was abandoned 41 years ago – and thus, will soon be DEAD…

 read more from source http://www.24hgold.com

Debt and Hyperinflation

by Ranting Andy www.milesfranklin.com

The inevitable COLLAPSE of the U.S. dollar is a mathematical certainty, but the timing of its occurrence is impossible to predict. Assuming no “black swan” events – like nuclear war or catastrophic market crashes – I believe the dollar will have lost the last vestiges of its “reserve currency status” within two to three years; and likely, within five years be replaced by a new, gold-backed currency. However, such numbers are pure speculation, as no one truly knows what will happen, or – more importantly – when, and why.

That is why I repeatedly recommend ownership of PHYSICAL gold and silver; as regardless of this time frame, the likelihood of prematurely selling your bullion is extremely low – barring personal financial emergencies, of course. And the same goes for “betting” on the timing of Hyperinflation – as if you hold too much debt before it occurs, you could lose the underlying assets – such as your home – or even your PHYSICAL PMs if you need to sell them to pay off your debts.

Moreover, think long and hard about the wisdom of purposefully holding large amounts of debt into what could be a cataclysmic financial event. Ann Barnhardt says to pay off as much debt as possible beforehand, with the aim of distancing oneself as much as possible from “the system” when “the Big One” hits. And frankly, I agree with her, 100%. Sure, if your bank fails, your mortgage obligation may go with it. But who’s to say the bank won’t be acquired by a more evil entity, such as the U.S. GOVERNMENT? For all we know, a new, totalitarian dictator will declare all mortgaged homes state property – or some other, equally draconian decree.

As for what happens to debt during Hyperinflation, it is absolutely devalued – benefitting the borrower, at the expense of the lender. Out of control MONEY PRINTING may cause a loaf of bread to cost $500,000, but your $500,000 mortgage will still be the same; in other words, worth the same as the bread. If you have limited savings, you still won’t be able to pay off your mortgage – especially if you lose your job, a highly likely scenario. However, you could sell ITEMS OF REAL VALUE – like a loaf of bread, or a gold coin – to obtain the funds to pay off your mortgage. Moreover, a handful of companies might even institute inflation-adjusted pay – though I wouldn’t count on it.

Hyperinflation could break out at any time – as in the case of the aforementioned “black swan” events. However, more likely a 1930s-like scenario of unemployment, poverty, social unrest, and war will precede it. PHYSICAL Precious Metals will protect you under all scenarios, but DEBT could prove just as much an albatross as a boon. It’s VERY rare for anything positive to ever come of debt, so I strongly advise you do not consider it an “asset.”

Author : Ranting Andy Andrew Hoffman was a buy-side and sell-side analyst in the United States (including six years as an II-ranked oilfield service analyst at Salomon Smith Barney), but since 2002 his focus has been entirely in the metals markets, principally gold and silver. He recently worked as a consultant to junior mining companies, head of Corporate Development, and VP of Investor Relations for different mining ventures, and is now the Director of Marketing for Miles Franklin, a U.S.-based bullion dealer.